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\nSilver Fern Farms attributed the turnaround to strong international red meat demand, tight cost controls and deferred investment into projects like factory automation.
\nPhoto: RNZ \/ Nate McKinnon\n<\/p>\n
One of New Zealand’s largest red meat companies is back in the black after a few years of financial losses.<\/p>\n
But Silver Ferns Farms is also counting the costs of halting exports into its key Persian Gulf markets.<\/p>\n
The firm with 14 meat processing plants across Aotearoa reported a profit after tax of $29.1 million for the 2025 financial year, up from a $21.8m loss the previous year<\/a>, and a $24m loss in 2023<\/a>.<\/p>\n The company has seven global outposts and attributed the nearly $51m turnaround to strong international red meat demand, tight cost controls and deferred investment into projects like factory automation.<\/p>\n Exports to Persian Gulf halted, for now<\/p>\n But its agility was being tested by war in the Persian Gulf<\/a>, as for other primary sector exporters<\/a>.<\/p>\n Twelve percent of Silver Fern Farm’s lamb and up to 5 percent of its beef went into Gulf states, that it entered via the embattled Strait of Hormuz, into key markets, including the United Arab Emirates and Saudi Arabia.<\/p>\n When the conflict broke out in late February, it had 140 containers in-transit destined for the Middle East<\/a>.<\/p>\n Silver Fern Farms chief executive Dan Boulton said most containers were able to be moved through other ports, though some still awaited documentation requirements on-port, and it diverted some product to other markets entirely.<\/p>\n He said it paused production into the Middle East, until it had clarity.<\/p>\n “As soon as the conflict started and we knew we were having issues, we made that decision to halt all production until we had transparency around what our options are.<\/p>\n “We’ll slowly resume production once we get certainty around supply chains back into that sector.”<\/p>\n Boulton said it was working with its supply chain partners like Kotahi to keep product moving into the important region.<\/p>\n He said it was looking at creative solutions to ensure it could continue to supply product into the region<\/a>, including considering air freight options and diverting via the Mediterranean Sea and down through the Suez Canal.<\/p>\n “So it’s obviously a longer transit time. But what’s important is that we continue to service our customers.<\/p>\n “But that will come at additional costs, which we’re working with our customers on.”<\/p>\n Securing livestock supply when margins are tight<\/p>\n Boulton said 2025 was a hard-fought year for the company dealing with low livestock volumes<\/a>.<\/p>\n “Though we’ve delivered a great result, there’ve still been quite tight margins,” he said.<\/p>\n The company tightened its purse strings these past few years, and cost control measures saw it cut full-time roles and seasonal lay-offs across its sites.<\/p>\n Boulton said tighter supply and high procurement costs put pressure on its ability to run the plants efficiently, on investment opportunities and its processing margins.<\/p>\n “We’ve had to fix capacity on and off, shift structures and longer seasonal layoffs,” he said.<\/p>\n “That’s been tough, but that’s what we’ve had to do to reduce our operating costs, in the light of the livestock numbers.”<\/p>\n Meanwhile, farmers were earning top dollar from processors for their stock, but Boulton said he expected farmgate prices to come off their highs<\/a>.<\/p>\n “We’ll see as market conditions change that there’ll be a little bit more of that retained within processing, so we can invest in the processing sector and invest in the market.<\/p>\n “I don’t see farmgate prices easing dramatically too much based on long-term demand, I just see a little bit of the top coming out as capacity rebalances with supply.”<\/p>\n The company gained new commercial partnerships, and revenue jumped $409m on 2024 to more than $3 billion this year.<\/p>\n